Auto Insurance
Anger Over Car Insurance Rates in Canada
Canada’s auto insurers, squeezed by soaring injury claims, falling investment income and slow-moving regulators, are hitting drivers with huge increases in premiums.
The public outcry has led politicians across the country to promise mandatory cuts in premiums and other reforms. That has left insurance executives wondering whether their industry, already flooded with red ink, will be the chief casualty, or whether their long campaign for regulatory change is finally paying off.
Michael Donoghue, chief executive of the Allstate Insurance Company of Canada, a unit of the Allstate Corporation of Northbrook, Ill., said that while his company ‘’had posted disastrous results in seven of the last eight quarters,'’ he was encouraged by the current furor.
‘’It seems like it had to become a political issue before the governments wanted to do anything,'’ Mr. Donoghue said. ‘’I see a good understanding of the issues.'’
But George Cooke, chief executive of the Dominion of Canada General Insurance Company in Toronto, expressed concern that with American- and European-controlled companies writing about two-thirds of auto insurance policies in Canada, heavy underwriting losses and political pressures could discourage foreign investment.
According to Mr. Cooke, many foreign-controlled companies ‘’have a for-sale sign up, either in neon lights or in invisible ink.'’
There has already been considerable consolidation. According to the Insurance Bureau of Canada, a trade group, 37 property and casualty companies have merged, sold or closed their Canadian operations since 1998; the number of active companies has fallen to 207 from 231.
As in the United States, auto insurance rules are a patchwork in Canada. Each of the 10 provinces draws up its own regulations, trying to balance the interests of consumers, insurance companies, lawyers and health care providers, among others.
In three provinces, government corporations have a monopoly on basic coverage, with private insurers selling only optional supplementary benefits. Six other provinces, including Ontario, have privately run systems, where insurance companies compete for business. Quebec has a hybrid system.
More : query.nytimes.com
Leave a comment
Comments Already Given »
No comments yet.
Related Articles from Auto Insurance
The Debate On Insurance Rages On In Trenton
Tapping into the public's anger over high car-insurance rates, Jim Florio made auto insurance reform one of the major themes of his successful campaign for governor in 1989. Now, a year and a half after Mr. Florio introduced sweeping changes in the state's automobile insurance law, the administration is claiming progress, the largest insurer in the state says it is leaving in a huff and insuring a car remains as perplexing as ever for millions of drivers. "It's taken a long time to get things screwed up, and it's going to take a long time to get it unscrewed," said
Legislators Promise Overhaul of New Jersey Car Insurance
Two days after Gov. Christine Todd Whitman barely defeated a candidate who tried to harness voters' anger over high auto insurance rates, Republican legislative leaders promised today that they would push through major proposals to reduce premiums. But, they said, the solution would not be Mrs. Whitman's plan, and it would probably not happen until next year. ''I don't think this discussion will be completed in the next six weeks,'' said Paul DiGaetano, a Republican from Passaic who is the Assembly majority leader. ''And I'm not sure it should be, because the public is telling us they want a broad-based
Insurance Hurdles to Health-Care Reform
Workers' compensation and automobile insurance, two largely private insurance systems that pay more than $40 billion in health- care bills each year, are presenting the President's Task Force on National Health Care Reform with a devilish dilemma. For people injured on the job or in car accidents, it is workers' compensation or auto insurance that pays their medical bills, not their standard health policies. If the President's task force includes these two types of insurance in a Federal program to rein in health-care costs, it will make health-care changes more complex. It may also anger the lawyers, doctors, labor unions
Giving Drivers Tailor-Made Data on Car Insurance
Some people call Peter B. Lewis, president and chief executive of the Progressive Corporation of Cleveland, a maverick and an eccentric. And Mr. Lewis, who favors black Stetson hats and has a passion for contemporary art, does not dispute the labels. After all, he is a committed Democrat, "which really makes me an eccentric in the insurance business." Politics aside, Mr. Lewis, 58 years old, has indeed built a track record of foraging into risky businesses -- like insuring motorcycle riders -- that make most competitors wince. And his pioneering reputation will surely be reinforced by his latest venture, one
New Jersey Legislators Vote To Overhaul Auto Insurance
Prodded by voter anger over paying the nation's highest automobile insurance rates, the New Jersey Legislature gave final approval today to a bill that would guarantee a 15 percent reduction in rates for most drivers. The measure ends months of legislative wrangling over how to lower premiums and appease voters whose frustration with the state's automobile insurance system nearly cost Gov. Christine Todd Whitman election to a second term last fall. Mrs. Whitman is expected to sign the bill into law on Tuesday. The bill seeks to reduce costs by limiting frivolous lawsuits and reducing fraudulent claims. It was approved